POWER OF SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) TO REGULATE ISSUE AND TRANSFER OF SECURITIES, ETC
SECTION 24 of Companies Act, 2013 deals with the provisions contained in this Chapter, Chapter IV and in section 127 shall,—
(a) in so far as they relate to —
(i) issue and transfer of securities; and
(ii) non-payment of dividend,
by listed companies or those companies which intend to get their securities listed on any recognised stock exchange in India, except as provided under this Act, be administered by the Securities and Exchange Board by making regulations in this behalf;
(b) in any other case, be administered by the Central Government.
Comment—For The Removal Of Doubts, It Is Hereby Declared That All Powers Relating To All Other Matters Relating To Prospectus, Return Of Allotment, Redemption Of Preference Shares And Any Other Matter Specifically Provided In This Act, Shall Be Exercised By The Central Government, The Tribunal Or The Registrar, As The Case May Be.
The Securities and Exchange Board shall, in respect of matters specified in sub-section (1) and the matters delegated to it under proviso to sub-section (1) of section 458, exercise the powers conferred upon it under sub-sections (1), (2A), (3) and (4) of section 11, sections 11A, 11B and 11D of the Securities and Exchange Board of India Act, 1992 (15 of 1992).
Comment: Where A Dividend Has Been Declared By A Company But Has Not Been Paid Or The Warrant In Respect Thereof Has Not Been Posted Within 30 Days From The Date Of Declaration To Any Shareholder Entitled To The Payment Of The Dividend, Every Director Of The Company Shall, If He Is Knowingly A Party To The Default, Be Punishable With
Imprisonment of 2 Years
Fine – 1000 Rupees For Every Day During Which Such Default Continues And Simple Interest @18% P.A During The Period For Which Such Default Continues.
Provided that no offence under this section shall be deemed to have been committed:—
(a) where the dividend could not be paid by reason of the operation of any law;
(b) where a shareholder has given directions to the company regarding the payment of the dividend and those directions cannot be complied with and the same has been communicated to him;
(c) where there is a dispute regarding the right to receive the dividend;
(d) where the dividend has been lawfully adjusted by the company against any sum due to it from the shareholder; or
(e) where, for any other reason, the failure to pay the dividend or to post the warrant within the period under this section was not due to any default on the part of the company.
Disclaimer: The Article is based on the Relevant Provisions and as per the information existing at the time of the preparation. In no event I shall be liable for any direct and indirect result from this Article. This is only a knowledge sharing initiative.
The Author – CS Deepak Seth (Associate Partner at Helpinghands Professionals LLP) and can be reached at contacthhpro@gmail.com or 9910248911.
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